Note: This page utilizes information from a variety of sources. As such, the currency of the information varies somewhat. The information presented on this page reflects the most recent data available as of February 2015.

Between fiscal year 2009 and fiscal year 2013, Nevada's total expenditures increased by approximately $600 million, from $8.3 billion in 2009 to $8.9 billion in 2013. This represents a 6.7 percent increase, below the cumulative rate of inflation during the same period (9.06 percent, calculated using the Consumer Price Indices for January 2009 and January 2013).[3][4]

This page contains the following information about budget processes and policy issues in Nevada:

a summary of the budget drafting process

trends in expenditures and revenues

current and past fiscal year budget developments

financial transparency measures

Budget process

The state operates on an biennial budget cycle that starts July 1 of each biennium. The sequence of key events in the budget process is as follows:[5][6]

The governor is required by statute to submit a balanced budget. In turn, the legislature is constitutionally required to pass a balanced budget.[6]

Expenditures

Definitions

Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:[7]

General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."[7]

Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."[7]

Federal funds: "Funds received directly from the federal government."[7]

Bonds: "Expenditures from the sale of bonds, generally for capital projects."[7]

2013 expenditures

The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context).[7] Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.

Expenditures by function

State expenditures in Nevada can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.

Source:National Association of State Budget OfficersNote**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Expenditure trends

From 2008 to 2012, expenditures on higher education, corrections and transportation decreased, with transportation expenditures decreasing the most at 1.9 percentage points, a 16.7 percent decrease in the share of the budget. During the same time period, expenditures on elementary and secondary education, public assistance and Medicaid increased, with Medicaid increasing the most, by 13.1 percentage points, a 106.5 percent increase in the share of the budget. The table below details changes in expenditures from 2008 to 2012.[7][9][10][11][12] Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures from 2008 to 2012 (as percents)

Year

Elementary and secondary ed.

Higher ed.

Public assistance

Medicaid

Corrections

Transportation

Other**

2012

23.6%

9.7%

3.2%

25.4%

3.8%

9.5%

24.9%

2011

21.5%

10.0%

0.7%

18.3%

3.5%

9.5%

36.5%

2010

21.5%

10.8%

0.7%

18.3%

3.9%

11.4%

33.5%

2009

20.6%

9.6%

0.7%

14.7%

5.2%

16.5%

32.6%

2008

16.6%

11.0%

0.6%

12.3%

4.2%

11.4%

44.0%

Change in %

7.00%

-1.30%

2.60%

13.10%

-0.40%

-1.90%

-19.10%

Source:National Association of State Budget OfficersNote**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Revenues

2013 revenues

The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context).[7] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue trends

The table below details the change in revenue sources in the general fund from 2009 to 2013.[7][9] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

The Nevada State Legislature approved a $6.6 billion budget for the 2014-2015 biennium. The budget included most of the recommendations submitted by GovernorBrian Sandoval, such as adding money for public schools and early development learning and restoring a 2.5 percent state employee pay cut. It was the first increase in funding for schools since the 2009 recession.[14]

The approved budget was comprised of five major budget bills. Outside of education funding, the general appropriations bill laid out $4 billion for the General Fund for the biennium, with $1.98 billion for the first year and $2.02 billion for the second.[14]

Fiscal years 2012 and 2013

Fiscal years 2010 and 2011

Historical spending

State budget historical spending below was compiled by the National Association of State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).[7][10]

Historical state spending in Nevada ($ in millions)

Fiscal year

General Fund

Other funds

Federal funds

Bonds

Budget totals

Total

% of Budget

Total

% of Budget

Total

% of Budget

Total

% of Budget

2011-2012

$3,062

40.2%

$1,978

25.9%

$2,554

33.5%

$29

0.4%

$7,623

2010-2011

$3,175

37.2%

$2,631

30.9%

$2,642

31%

$78

0.9%

$8,526

2009-2010

$3,018

36.4%

$2,365

28.5%

$2,792

33.7%

$109

1.3%

$8,284

Averages:

$3,085

38%

$2,324.67

29%

$2,662.67

33%

$72

1%

$8,144.33

General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.Federal funds: Funds received directly from the federal government.Bonds: Expenditures from the sale of bonds, generally for capital projects.

State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Nevada had a state debt of over $52 billion. Its state debt per capita was $19,152. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.[15][16]

Public pensions

A 2012 report from the Pew Center on the States noted that Nevada's pension system was funded at 70 percent at the close of fiscal year 2010, below the 80 precent funding level experts recommend. Consequently, Pew designated the state's pension system as cause for "serious concern."[18]

Taken together, the funding ratio for the state's pension systems decreased from 77.30 percent in fiscal year 2007 to 70.97 percent in fiscal year 2012, a drop of 6.33 percentage points, or 8.2 percent. Likewise, unfunded liabilities increased from approximately $6.3 billion in fiscal year 2007 to $11.2 billion in fiscal year 2012.

Credit ratings

Credit rating agencies, such as Standard and Poor's, assign grades to states that take into account a state's ability to pay debts and the general health of the state's economy. Generally speaking, a higher credit rating indicates lower interest costs on the general obligation bonds states sometimes sell to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). This is turn results in lower interest costs, thereby lowering the cost to taxpayers.[19][20]

The table below lists the Standard and Poor's credit ratings for Nevada and surrounding states from 2004 to 2014. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest.[21]

Federal aid to state budget

The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1," the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.[22]

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[22]

Stimulus

According to Recovery.gov, the official government website for the Recovery Accountability and Transparency Board, under the American Recovery and Reinvestment Act, Nevada received $2.35 billion in federal stimulus funding from the American Recovery and Reinvestment Act between February 2009 and June 2013.[23]

Multi-measure budget transparency profile

The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for Nevada, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.[25][26]

IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. Nevada tied for 20th in the nation with 12 other states, earning five out of eight possible points.[26]

Nevada - IGPA score for budget process, contents and disclosure

Budget transparency indicator

Yes or no?

Performance measures

"Generally Accepted Accounting Principles" budget

N

Multi-year forecasting

Annual cycle

N

Binding revenue forecast

Legislative revenue forecast

Nonpartisan staff

Constitution or statutory tax/spend limitations

N

TOTAL

5

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[26]

U.S. PIRG "Following the Money" report

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[27] According to the report, Nevada received a grade of D- and a numerical score of 52, indicating that Nevada was "lagging" in terms of transparency regarding state spending.[27]

Accounting principles

The Nevada Legislative Auditor audits Nevada's state agencies and publishes audit reports online. The Legislative Auditor is a statutory officer appointed by the Director of the Legislative Counsel Bureau with the approval of the Legislative Commission for an indefinite term whose qualifications and duties are defined by law. The Legislative Auditor serves as staff to the Nevada State Legislature and its various committees, and was the chief of the Audit Division.[28]

The Institute for Truth in Accounting (IFTA) rated Nevada “timely” in filing the state’s Comprehensive Annual Financial Report (CAFR) – the annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and six states as worst. IFTA did not consider Nevada's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis did not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[29] Nevada's CAFRs are prepared and published online by the Nevada Controller's Office. They can be found here(dead link).

The Nevada Controller is one of the six constitutional officers of the state and is elected to a term of four years. The Controller is the chief fiscal officer charged with administering the state accounting system and the state's debt collection program under the Nevada Constitution Article 5, Section 19.[30]